Item Ledger Entries Open Forever

Savatage

I've been spending some time on our costing issues.

I created a report to calculate our profit percentage using 2005 sales & current Unit Cost (line item by line item) - Then run the same report using Last Cost.

When comparing the two we were off by 7% for the whole years profit.

It's our unit cost that are off. Anyway while diving into the Item ledger entries I noticed that many entries are marked "OPEN" mainly they are all CREDIT MEMO's.

I filtered to <01/01/2003 just to be sure that they are really all closed. These are closed for sure.
anyone know why these aren't closing?
Some old setup missed or known issue?
Since they are open can I assume the Adjust Cost/GL Post isn't taking these into account??

$1,000,000 question - What if I just close them manually? Good/Bad/Ugly?

Savatage

after more review

It seems the Unit cost is calculating off the Item ledger Entries "Adjusted cost" which would be fine if it was just calculating using the "Closed" entries.
But it throws in the "OPEN" Entries too, so it the adjusted cost is zero (because it's open still) the unit cost adds that in & throws it all off.

...thoughts

ara3n

What kind of items are they? seriliazed, lot tracked, variant? diff location? These Items are goods in your inventory.
What happened to the actual Item?
If you want to close them do negative adjust and apply it to those entries.

Alex_Chow

Entries can be open if you use the "Applies-From Entry No." function. It will not 0 out the remaining quantity, nor apply it to the proper entry.

This is something that's there by design.

Savatage

When we were set up our Solution center came up with a plan for credits (returns)
they set up 2 locations :
Active & Damaged

when an order comes back & it's fine we enter the credit & use Active as it's location so it goes back into stock.

If it comes back damaged we change the location on the CM to damaged so it doesn't

"note we have a qty field on our item card filtered for "Active" so we know how much is on the shelf."

So any kind of credit that doesn't effect Inventory goes to Damaged too.
For example a shortage. "customer is always right" so when they call saying they were short we issue a credit and make the COST ZERO on the credit. ( because we shipped it, they say no...so here's your money and there is no cost hitting us)

looking at the value entries & the item ledger entries I believe this method is killing our Unit Cost. Unit Cost is taking into account Every Entry not just the entries listed as "Active" so these Zero costs, which do not effect our INV QTY, are hurting our INV COSTS.

These are regular items no variants - like a bottle of shampoo.
It still doesn't explain why these Credit entries are still listed as open when they aren't, but I'll take any answers at this point.

Any thoughts appreciated

maybe the bottom line is I need to correct how the unit cost is being calculated. We're using FIFO

Savatage

another thought..

In our inv setup I see our Avg Cost Calc type is set to: "Item"
not "Item & Variant & location"

Not that we use Ave cost anymore - but will this effect UnitCost too if i change it?

The more & more I look into this I believe we were screwed from the start with a bad setup. ](*,) ](*,) ](*,)

& Yes I read.., anyone tried changing this?:
Warning
You must choose the type of method very carefully during setup, because if you change the contents of this field, all entries concerning items with costing method Average will have to be readjusted. This may take several hours if your database is large.

Savatage

Sorry for another post here - but I'm trying to get info & VENT! at the same time.

Anyway - I'm trying the Setup switch from Item to Item & Location & Variant to see what happens - i'll keep you updated

(yes it's on a copy of the live database) O:)

Note: Standard & Last Costs are good but everything seems to use the damn Unit Cost. ...

It seems I've changed this topic to Unit Cost Hell instead of Open Ledger Entries Forever - I'll take input from either question - thanks All

"I'm Trapped inside this Octavarium"

David_Cox

Hi the problem you may have is matching the entries, to close a ledger entry the Location, Variant, SN Tracking etc: have to match, and you say you are putting the returns into a different Location, so they will never be closed, unless you move and apply them, or write them off from the same location.

So you cannot apply across locations and variants, if you Purchase/Positive into "Location 1" and Negative/Sale from "Location 2" the net effect may be 0, but the costs will not be applied as the entries do not match, and both entries will remain open.

Also the cost adjustment error could be here, as the sale will not have an "applied" invoiced Cost from a Purchase, to move to COG's, if you see what I mean.

There are several ways via journals you could correct this, but it depends on how many entries you have, as to how big a task it is.
you would transfer the open Purchase from "Location 1" to "Location 2", then this would be applied by the system to the oldest open sale.

Then when you adjust costs your cogs will be corrected, as the system will take the positive entries cost and use this as the ("Adjusted Cost") cost of sales value.

Savatage

That's some great Info! \:D/

I think I'm talking 1000's of entries. :shock:

It can't just be me that set up this way..What are the other ways of handling Returned Damamged Merch & Issuing Credit? We've looked at Item Charge in the past but it didn't do what we needed it to do.

Perhaps it can be revisited.

What if I created a report, where I can select a date range and it Unchecks the OPEN Entries - What kind of effect (if any) would it have?

it's 6:47pm let me ponder the next step at the BAR!

Phenno

do not do that. you will have closed entries but there will be no connection in item application entry and your costs will not be updated (as they should be).

David_Cox

Savatage wrote:

That's some great Info! \:D/
I think I'm talking 1000's of entries. :shock:

I would look at the Item posting Codeunit, save it as a new number, look at the Item Application part, and work out from there.

I would do a pass that allowed cross Location Matching, where I specified what to match, then apply the entries within this codeunit.

After this the Adjust cost will work as it is not location specific, only Application specific.

After all are corrected "Closed", sit down and work out a system for your returns.
It's not hard, grade the returns and either Move back to a free stock location to "sell on" via a transfer journal, Write off from the return Location, or leave on hold in the return location.

When you do a negative or positive adjustment you can apply to a specific entry, from a journal, look at the field "Applies-to Entry", here you can drill down and select an "Entry No." to Adjust, when you post the system will only apply to this entry.

Savatage

We will perobably start with the Revaluation Journal to get the cost corrected & stop Zero-ing out the costs on Shortages.

We'll come up with a new way to do them.

I'll test it on an item or two.